mihomes - 10:12 pm on Jul 2, 2013 (gmt 0)
Phranque - you solved the problem. Everything is happening correctly it is just that IE does not update the url in the browser if the page is not found. Since I was using this on a test domain I had not created any page structure for the most part so when there was a 404 encountered it just returned the 404 without updating the url.
Lucy I also made the change to have all redirects before the rewrite.
The only thing I can complain about now is this url format :
redirects to www.test.com/subs/blog/ then
redirects to blog.test.com
because it has two redirects in one. I don't think there is a way around that one though and doubt it would even come up much, but at least it works if it should. Thanks for everyones help on this. Guess I should have looked at the responses in the first place just assumed the browser url would always update accordingly.
If anything else can/could/should be optimized please chime in. Have a great week everyone!